Archbishop Of Canterbury Urges Tax Hike To Combat 'Unjust' Economy

Report says living wage should increase by £1 an hour.

Andrew Kelly / Reuters
The Archbishop of Canterbury Justin Welby has called for tax hikes

The Archbishop of Canterbury has called for a major overhaul of how the economy works, suggesting those who “have the most, should pay the most” in tax, while also calling for more public spending.

Justin Welby spoke out on Wednesday as a major report by the IPPR Commission on Economic Justice, of which he is a leading member, made 73 recommendations, including increasing capital gains tax and corporation tax.

The archbishop said digital media companies must pay their “proper” share of tax to support Britain’s society and should face regulation reflecting their power - similar to those faced by energy and water companies.

“What is clear is that tax should be a fundamental part of being a citizen, and that those who have the most should pay the most and that no company, through being multinational, being global, can evade the responsibilities of paying its proper amount of tax based on the revenues it earns in this country,: he said.

Asked whether companies like Facebook, Google and Amazon should pay more tax in the UK, he told the BBC’s Today programme: “They should pay a fair amount based on the revenues that they earn from our country. If we are going to have a hope-filled future… everyone has to contribute who takes from this country. Everyone has to put things back and they have to put it back most of all in tax.”

On the Commission’s suggestion that the digital industry could be regulated like the utilities, Welby said: “If you corner the market in data, you have probably more wealth advantages than if you corner the market in gold or oil or something like that.

“Data is the real place where the money is, and we’ve always said that people with huge power should be regulated.”

While backing tax hikes, Welby said an injection of public spending was needed in areas such as housing, education and health to ensure “the dignity of each human being”.

“So when someone falls into mental illness they don’t get discarded... that when someone who has worked hard all their life, and has paid their taxes, needs help at their end of their life, the NHS is there to help them with dignity and care.”

Welby said the economy was currently “unjust” with Britons relying on food banks “even when you’ve got two adults in a household living reasonably tightly and both working”.

He added: “People suffer from being caught in a debt trap because they can’t replace a basic bit of equipment they need, like a new stove, a washing machine, let alone luxuries.”

Welby also argued for an increase in the minimum wage to better reflect the cost of living and support struggling families.

Without action, “bitter resentment” would grow, he said.

The commission, set up by the Institute for Public Policy Research, said the present “living wage” should be increased by £1 an hour to £8.83 for those over 25. People on zero-hours contracts should be paid 20% more on top of that figure, it said.

The report also called for higher levels of corporation tax on businesses, a “minimum tax rate” on multinationals such as technology firms to stem “tax avoidance” and the scrapping of inheritance tax - to be replaced by a “lifetime gift tax” on any gifted income above £125,000.

The commission’s report says that problems in the economy are fundamental and have been building for more than 40 years.

Welby added to the Today programme: “It has nothing to do with Brexit or anything like that, this is something that has been coming for generations,” he said, adding that the UK had an “enormous challenge” to ensure the economy is “based on justice and fairness”.